Foxconn helping to shoulder CDMA iPhone production? [U]

updated 10:00 pm EDT, Wed October 27, 2010

by MacNN Staff

Foxconn, Pegatron to ship 30m CDMA iPhones in 2011

(Update: more Pegatron leaks) Foxconn has been brought on to help take some of the production workload for the CDMA iPhone, industry contacts believed on Wednesday. Known in China through its parent label Hon Hai, Foxconn has reportedly been asked to share manufacturing "evenly" with the existing manufacturer Pegatron. The Taiwan Economic News suggests that Foxconn alone has been asked to make 15 million iPhones through all of 2011; by extension, as many as 30 million CDMA iPhones would be made across the two companies.

The same insiders reiterated the by now common belief that Apple would launch the CDMA edition in early 2011 through Verizon. However, they added that China Telecom may follow to help Apple gain additional share. CDMA support outside of the US is likely essential to Apple's rationalization for the device and may also explain the SIM slot in a recent prototype, since Chinese CDMA users can frequently rely on CSIM cards.

Apple had at one point characterized CDMA as a "dead" technology as GSM, HSPA and eventually LTE were taking over, but the company is believed to have reconsidered its strategy owing both to upgrade roadmaps and to competition. Verizon will launch LTE this year, but coverage won't reach the majority of possible subscribers until 2012; CDMA will be necessary as a fallback. AT&T and T-Mobile also don't expect their LTE networks to start until sometime in 2011.

Android's expansion is also thought to be a major motivating factor. The decision to offer the iPhone only through GSM providers has given Google safe havens at Verizon and Sprint, where Android flagships like the Droid X and Evo 4G have been the only options for customers unable or unwilling to switch networks. A CDMA iPhone wouldn't necessarily reverse any Android gains but could soften its growth and keep customers in New York City and San Francisco whose AT&T network problems might lead them to switch.

Regardless of iPhone plans, Foxconn was also said to be investing an initial round of $299 million into its upcoming Chengdu factory with Apple at least partly in mind. The southwestern China plant would help produce iPads to keep up with high demand.

Update: A second claim this evening has Pegatron making 10 million CDMA iPhones in 2011. It has purportedly been installing new equipment and hiring as many as 10,000 new workers for its Shanghai factory. The new models would start shipping in December, lining up with talk of a January introduction.

Company chief Jason Chang wouldn't name customers but admitted that the extra staff were to handle smartphone increases. Pegatron would see a "strong increase" in revenues in early 2011, he said. The sources for the new leak put the estimated revenue increase for all of 2011 between 20 to 30 percent.

TOTAL_COMMENTS Comments

There are other countries that are stuck with CDMA, some for the foreseeable future with *FAR* greater subscriber bases than Verizon -- some of which had been in negotiations with Apple to carry iPhone 4 for the last 4-5 months; Apple is limited by an *exclusivity* contract with AT&T that covers 5 years, and which started in 2007.

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